The federal government has announced a new business risk management program that is aimed at helping fund a switch in responsibility for producer income protection from public to private schemes.
The new BRM program rules, which were launched April 1, will sharply reduce producer coverage from government programs. Several farm leaders said the new announcement is a welcome development.
“We are extremely pleased with the government’s decision to introduce this program,” Canadian Federation of Agriculture president Ron Bonnett said.
“This program will give the sector the added capacity it needs to turn innovative ideas into concrete measures for resilient farm businesses.”
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He said the government has talked for years about supplementing publicly supported BRM programs with private programs.
“But they never offered support for developing those programs and they now are offering a fair chunk of money,” he said.
The AgriRisk Initiative under the Growing Forward 2 policy framework, announced last week in Vancouver, will offer $15 million in federal funding over five years.
Farmers and private sector insurance or financial interests will have access to up to $3 million annually and $500,000 per project to develop privately supported BRM programs including research and development work as well as administration for program pilot projects.
“I think it gives us an opportunity for developing hedge options programs or other market-based instruments that would reduce producer risk,” said Bonnett.
Grain Growers of Canada executive director Richard Phillips said he sees the federal seed money as a good incubator for the future.
“I see this as a way forward to Growing Forward 3 (the next policy framework to be launched in 2018),” he said.
“There has been a trend to seeing the government pull back from program funding and to save dollars in programming, so if that is happening, now we have some support in developing risk management programs that are public-private partnerships.”
The CFA statement supporting the new $3 million annual five-year investment in private BRM program development suggested the money will let farmers decide how best to design BRM programs, which they are mainly responsible for funding.
“Private sector and industry direct project development will further ensure projects are targeted, bankable and useful for producers on the ground, in the field,” said the statement from Bonnett.
